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    The problem with performance related bonuses are manifold.

    First, measurability. This has to be totally robust.

    Second, do the remuneration committee (usually made up of non-executive directors) really understand the dynamics of the business sufficiently to make the right decisions?

    Thirdly - and this is the big one - is the upside commensurate with the potential downside? If a CEO can get £3m for great performance, fine, but if he screws up he should walk away with nothing. Otherwise - and I have been saying this for many years - the risk/reward relationship is skewed heavily against the shareholder.

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